Shree Sai Hanuman Smelters Private ... vs Senior Intelligent Officer on 3 June, 2024

GST Judgment Summary

Title: Shree Sai Hanuman Smelters Private Limited vs Senior Intelligent Officer
Date of Judgment: 3 June, 2024
Court: High Court of Judicature at Madras
Judge: Hon'ble Mr. Justice Senthilkumar Ramamoorthy

1. Outcome

The Writ Petition was disposed of. The Court declined to issue a Writ of Mandamus to drop the proceedings initiated by the CGST intelligence officer. Instead, the Court directed the petitioner to respond to the summons and raise all its objections, including jurisdictional challenges, before the issuing authority. The petitioner's right to initiate fresh legal proceedings was preserved if it is later established that the proceedings are indeed against the petitioner and not a third party.

2. Core Issue

Whether an intelligence officer of the Central GST (CGST) department has the authority to issue a summons under Section 70 of the CGST Act to a person whose assessment jurisdiction lies with the State GST (SGST) authorities, especially when a prior court order seemingly prohibits such cross-jurisdictional interference.

3. Key Facts

• The petitioner company, whose GST assessment is administered by the State (SGST) authorities, received a summons dated 29.05.2024 from the Senior Intelligent Officer, DGGI (a Central/CGST authority).
• The summons, issued under Section 70 of the CGST Act, was addressed to the petitioner's accountant.
• The petitioner contended that proceedings had already been initiated against them by the SGST authorities, in which they had participated.
• The petitioner filed a writ petition seeking to quash the CGST proceedings, arguing a lack of jurisdiction.

4. Arguments

• Petitioner's Arguments:

  1. Lack of Jurisdiction: Since the petitioner's assessment is allotted to the SGST authorities, the CGST department has no jurisdiction to initiate any proceedings against them.
  2. Violation of Precedent: The summons violates a previous High Court order (in W.P.No.34792 of 2019 batch) which held that CGST officers should not interfere with assessments assigned to SGST authorities.
  3. Parallel Proceedings: The action amounts to parallel proceedings by both Central and State authorities, which is impermissible.

• Respondent's (CGST Department) Arguments:

  1. Third-Party Inquiry: The summons was not issued in relation to proceedings against the petitioner, but rather as part of an ongoing inquiry into another entity, "M/s. GBR".
  2. Scope of Section 70: Section 70 of the CGST Act grants a proper officer the power to summon any person whose attendance is considered necessary for an inquiry, regardless of that person's jurisdictional assessing authority.

5. Court’s Reasoning

• The Court acknowledged the wide powers vested under Section 70 of the CGST Act, which allows an officer to summon "any person" whose attendance is deemed necessary.
• It held that a Writ of Mandamus, which is meant to enforce the performance of a statutory duty, cannot be issued to restrain an officer from performing that duty.
• The Court noted the factual ambiguity regarding whether the inquiry was against the petitioner or "M/s. GBR".
• Given this ambiguity and the statutory power under Section 70, the Court found it premature to intervene.
• The appropriate remedy for the petitioner is to respond to the summons and raise all contentions, including the jurisdictional issue and the precedent, before the summoning officer. This would clarify the nature of the inquiry.
• The Court protected the petitioner's future rights by stating that if it turns out the proceedings are indeed against the petitioner (and not M/s. GBR), the petitioner is free to initiate fresh legal proceedings, citing the earlier High Court judgment.

6. Statutory References

• Central Goods and Services Tax Act, 2017 (CGST Act):
  • Section 67: Power of inspection, search, and seizure.
  • Section 70: Power to summon persons to give evidence and produce documents.
• Constitution of India:
  • Article 226: Power of High Courts to issue writs.

7. Precedents Cited

• An order of the Madras High Court in a batch of writ petitions, specifically referenced as W.P.No.34792 of 2019 batch.